Could Bitcoin Rally in the Second Half of 2018?

Could Bitcoin Rally in the Second Half of 2018?

This is a serious question, especially for those who invested in Bitcoin at the end of 2017. At that time, the price of Bitcoin quadrupled and then slumped impulsively, from almost 20,000 towards 6,000. Even though a rebound of 100% had taken from the lows, the price had encountered resistance around the 11,500-12,000 area. Since then, the downside had resumed and some cryptocurrency users are beginning to ask whether Bitcoin is really dead.

History tends to repeat itself

This is not the first time Bitcoin had such a performance. A similar situation with the one we saw at the end of 2017 happened at the end of 2013, as well. At that time, Bitcoin had surged towards 1,090 and then lost around 80% of the value. The same boom and bust cycle repeated last year and we are now seeing the bust unfolding.

As Bitcoin heads towards 2018 low, located around 6,000, it is possible that we might see a rebound in price. From a seasonal approach, the first quarter of the year had been historically bad for cryptocurrencies.

First of all, it is a period when people need to pay their taxes for the past year. That is why they need to liquidate their positions in order to have enough money for that.

Secondly, at the end o,f 2017 we had a unique situation, no regulation, high interest for cryptocurrencies, a huge inflow of capital and a lot of new companies that are based on the blockchain technology.

Despite the slump we saw in the price of Bitcoin, the situation could begin to change starting from April 2018. From an historical point of view, the month of March had been bearish six out of the last seven years. In April, however, the price of Bitcoin had risen five of the last seven years.

This seasonality cannot be ignored and we expect to see how the market will respond in 2018. We are currently having extreme oversold conditions and buyers might want to reconsider buying the cryptocurrency. Strong support lies ahead and sellers will have to face tough buyers.